MIL OSI Translation. Government of the Republic of France statements from French to English –
Source: Switzerland – Department of Foreign Affairs in French
DFI Commissions
Bern, 02.09.2024 – The Federal Commission for Occupational Pension Provision (BVG Commission) recommends to the Federal Council that the minimum interest rate be maintained at 1.25%. This rate determines the minimum interest at which retirement assets under the mandatory occupational pension scheme must be remunerated.
The committee examined whether the current minimum interest rate of 1.25% should be maintained, increased or lowered. The majority of its members were in favour of maintaining the minimum interest rate at its current level. On the one hand, the markets have recovered after the downturn in 2022 and the financial situation of pension funds is good, but on the other hand, interest rates have fallen. The decisive factor in setting the rate is the performance of the yield on Confederation bonds and, in addition, that of shares, bonds and real estate. The proposals made by its members ranged from 0.75% to 1.5%.
It should be remembered that pension institutions cannot devote all of their investment income to the minimum remuneration of retirement assets. The law requires them to constitute reserves for fluctuation in value, to make the necessary provisions and to fulfil their obligations in terms of pensions. Unless there is another source of financing, the proceeds of the assets are also used to cover their management costs.
In making its recommendation, the Commission took into account the fact that it concerns a minimum rate. The joint supreme body may set a higher rate if the financial situation allows. However, pension institutions that only provide the mandatory occupational pension scheme and which consequently suffer from the high conversion rate often do not have this room for manoeuvre.
It is up to the Federal Council to modify the minimum interest rate according to circumstances.
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Christine Egerszegi-ObristPresident of the Federal LPP Commission 41 79 217 64 26
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DFI Commissions
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EDITOR’S NOTE: This article is a translation. Apologies should the grammar and/or sentence structure not be perfect.
